Our economy has 'collapsed', says Sri Lankan PM Ranil Wickremesinghe, 'aid from India NOT....'

Pic courtesy: Reuters

Colombo (Sri Lanka): Prime Minister of crisis-ridden Sri Lanka on Wednesday (June 22) said that he will hold discussions with the International Monetary Fund (IMF) and arrive at an agreement to obtain an additional credit facility. "The only safe option before us now is to hold discussions with the International Monetary Fund. In fact, this is our only option. We must take this path," said PM Ranil Wickremesinghe said while addressing the Sri Lankan Parliament.

Wickremesinghe said that his country's debt-laden economy has "collapsed" after months of shortages of food, fuel and electricity, and it cannot even purchase imported oil. "Following discussions with the Central Bank, Treasury, relevant government officials, professionals and experts this plan has already been formulated. I urge you to inform us of a better solution if available. In fact, if you are in possession of a practical and more favourable plan for the country we call on you to put it forward," said the Sri Lankan PM. The PM said that an IMF team had arrived in Sri Lanka on Monday. Wickremesinghe lauded the assistance provided by India, however, he said, "financial assistance provided by India is not "charitable donations" and the island nation facing severe economic crisis must have a plan to repay these loans."

Sri Lanka has been facing the worst economic crisis since independence in 1948, leading to an acute shortage of essential items like food, medicine, cooking gas and fuel across the island nation. The nearly-bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026. Sri Lanka's total foreign debt stands at USD 51 billion. The Indian credit lines since January this year have provided a lifeline to Sri Lanka amidst growing public dissent over the worsening economic conditions.

Wickremesinghe said next Monday, a team of representatives from the US Department of the Treasury will also arrive in Sri Lanka. We intend to enter into an official level agreement with the IMF by the end of July. He also laid out the plans to bring out the island nation from this crisis. The Sri Lankan PM also highlighted the debt restructuring plan with IMF.

Explaining further, PM Wickremesinghe said that in parallel to holding talks with IMF, Sri Lanka will also organise a credit aid conference with India, Japan and China - the main lending countries to Sri Lanka."We are also currently holding discussions with the World Bank, Asian Development Bank, the United States, other friendly nations and heads of state to secure interim short-term loans till we receive IMF support. We will be able to lay the foundation to ensure economic stability following the successful completion of these tasks. But this by no means will be the end. In fact, it will be the beginning of our journey. A new journey toward a stronger economy. We will then have to forge ahead with our plans to strengthen and create a new Sri Lankan economy," said Wickremesinghe.